Our website uses cookies to improve your user experience. If you continue browsing, we assume that you consent to our use of cookies. More information can be found in our Cookies Policy and Privacy Policy.

Skandia fears further curb on pension relief

It says tax relief on contributions made by salary sacrifice or as personal contributions to an occupational pension scheme could be 60 per cent for people earning £100,000 £112,950.

The removal of higher-rate tax relief on pensions for people earning over £150,000 is expected to affect around 291,000 people but Skandia says the Government may restrict relief further to affect over three million people who are higher-rate taxpayers but earn less than £150,000.

Gross pension tax relief is estimated to have cost the Government £29.3bn in 2007/08, with a quarter of this sum going to the 1.5 per cent of savers earning over £150,000.

The Government expects to increase revenue by £3.1bn thr-ough the changes to higher-rate pension tax relief but Skandia says: “This represents just 11 per cent of the total tax relief given to pension contributions and it is likely that further measures will be needed to tackle unprec- edented borrowing levels which are anticipated to total £528bn over the next five years.”

Head of tax and financial planning Colin Jelley says: “It is important that the estimated 3.3 million people who are higher- rate taxpayers and are not yet caught by any restrictions to tax relief on pension contributions consider accelerating their pension funding if they can in case any further restrictions are imposed.”

Intelligent Pensions technical director David Trenner says: “If you have got money and you are earning enough to be eligible for 40p tax relief, grab it while you can. Curr- ent rules can be changed by this Government without any compunction.”

Join Trevor Greetham, Head of Multi Asset at Royal London Asset Management (RLAM), for a webinar on 30 March at 2pm. During the update, Trevor will consider how various asset types have fared in 2017 and offer his outlook, using the Investment Clock model to illustrate his views. Find out more here

Newsletter

Latest from Money Marketing

The Competition and Markets Authority has criticised insurers over “stealth price rises” and costly exit fees for loyal customers. The watchdog looked into areas including cash savings, mortgages and home insurance after charity Citizens Advice raised a so-called “super complaint” over how longstanding customers are treated by financial services organisations. The CMA has recognised that […]

Banking lobbyists have warned that UK banks currently face higher tax rates than international counterparts, and that these could hasten banks’ departures if they remain after Brexit. Reuters reports that research commissioned by UK Finance and carried out by consultancy PwC shows London banks face an effective tax rate on profits of 50.6 percent, above […]

Barclays has been fined $15m (£11.9m) by US regulators after attempts were made to unmask a whistleblower by chief executive Jes Staley. In 2016, a Barclays employee sent two letters regarding concerns over the chief executive’s decision to hire a former colleague to work at the bank. The whistleblower posed questions both over the experience […]

19th December 20188:33 am

Comments

There is one comment at the moment, we would love to hear your opinion too.

The HMRC estimate for ALL higher rate taxpayers 2009/10 is 2.91m – a big drop from 2008/09 thanks to hikes in personal allowances and the width of the basic rate band, not to mention constrained income growth. The numbers are to be found on http://www.hmrc.gov.uk/stats/income_tax/table2-1.pdf

Leave a comment

Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.